Explain How the Risks Differ for Holders and Writers of Foreign

question 21

Essay

Explain how the risks differ for holders and writers of foreign exchange options. Additionally, describe the difference between American and European options. Finally, how is the intrinsic value of an option calculated?

---

Definitions:

Arithmetic Test

An examination designed to assess a person's ability and skill in mathematics, especially in basic operations like addition, subtraction, multiplication, and division.

Unmotivated

Describes a lack of desire or willingness to take action or exert effort towards goals.

Dispositional Attribution

The tendency to attribute someone's behavior to their personality or character rather than to situational factors.

Situational Attribution

Refers to the process of attributing a person's behavior to external factors, such as the situation or environment they are in.